Dissenting workmen and settlement rights: union consent did not bind non-parties, and wage dues could end at an earlier cut-off.

Dissenting workmen were held not bound by consent terms entered into between the registered trade union and creditors because they were not parties, no clear authority of representation was shown, and their statutory claims could not be defeated by implied waiver or tacit consent. For wage computation, Section 445(3) of the Companies Act, 1956 was treated as fact-sensitive rather than imposing a fixed rule, and an earlier cut-off was applied where the company had long ceased operations and its assets had been realised under judicial supervision. The claim for notice pay was rejected because the amended scheme under Section 25-O of the Industrial Disputes Act, 1947 operated as a complete code on that issue.

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Issues: (i) Whether the dissenting workmen were bound by the consent terms entered into between the registered trade union and the creditors; (ii) whether the dissenting workmen were entitled to wages up to the date of the winding up order or an earlier cut-off date; (iii) whether the workmen were entitled to notice pay.

Issue (i): Whether the dissenting workmen were bound by the consent terms entered into between the registered trade union and the creditors.

Analysis: The consent terms had been accepted subject to the rights of dissenting employees being kept open, and an amount was separately retained to meet their claims. The dissenting workmen were not parties to the settlement, and there was no clinching material to show that the union had authority to bind them or that they had consciously and voluntarily accepted the settlement. In the absence of such material, their statutory entitlement to have claims adjudicated could not be defeated by implied waiver or tacit consent.

Conclusion: The dissenting workmen were not bound by the consent terms.

Issue (ii): Whether the dissenting workmen were entitled to wages up to the date of the winding up order or an earlier cut-off date.

Analysis: The deeming fiction in Section 445(3) of the Companies Act, 1956 does not create an inflexible rule that wages must always be computed till the winding up order. The relevant date depends on the facts and circumstances. Here, the company had become unviable long before winding up, its assets had been sold under judicial supervision, the factory had ceased to function, and the company had become a shell. In that setting, the earlier date on which the Provisional Liquidator was appointed was held to be the appropriate cut-off for calculating the dissenting workmen's dues.

Conclusion: The dissenting workmen were entitled to wages only up to 29 September 2005, not up to 24 October 2008.

Issue (iii): Whether the workmen were entitled to notice pay.

Analysis: The claim for notice pay was rejected on the basis of the amended scheme under Section 25-O of the Industrial Disputes Act, 1947, which was treated as a complete code for the point in issue. No infirmity was found in the disallowance of that claim.

Conclusion: The claim for notice pay was not maintainable.

Final Conclusion: The common order was modified only to the extent of the wage cut-off date, while the remaining directions were sustained, and the separate challenge by the individual workman failed.

Ratio Decidendi: Dissenting workmen are not bound by a settlement unless their authority to be represented is established or they have consciously accepted it, and the cut-off date for workmen's dues may be fixed earlier than the winding up order where the company had ceased operations and its assets had already been realized under judicial supervision.

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